The current real estate environment that we've been in for the past several years hasn't presented any opportunities for deals like this.Because of the above bullet point, my real estate folio is kicking off a ton of profit each year which is fully taxable at ordinary income rates for me with federal plus state that means 42%From day one we've always self-managed everything, and built a great team of sub’s and handymen in every area, so that I’ve never had to do any labor.

Tax-wise, profits are taxed at your ordinary income rate, and frequent flips may subject you to self-employment tax if classified as a dealer by the IRS.

Think about all the extra time trouble and cost it takes to turn an ordinary house into a vacation rental...just my two cents though...

It comes with guides on how to ride the tubes, a crash course in local customs, places of interest, places to avoid, and holly cow it looks just like what they had in there heads of what a London "flat" would look like, so charming and so "Brit"..... 

Getting P&I payments (and paying ordinary income on it), will NEVER yield a better return than interest only. 

What you're posting about does not sound out of the ordinary at all. 

I understand that if you live in a state that does not have a state income tax - you won't have any state tax liability, but based on $110K income, you would be in a 24% federal tax bracket...Distributions from an IRA or Roth conversion would be considered ordinary income and subject to ordinary income tax; capital gain tax is not applicable here, so I'm not sure why you are bringing it up... 

Why mention the tenant will be responsible for appliance repair above ordinary wear-and-tear?

I'm sure your lease and the law require the tenant to return the property in the same condition it was received, minus ordinary wear and tear.I would file again.

Traditional IRA withdrawals are taxed as ordinary income, with a 10% penalty if under 59½, potentially pushing you into a higher tax bracket.